Sources inform ''Globes'' that Given Imaging Ltd. (Nasdaq: GIVN; TASE: GIVN) has resumed talks, which might lead to the sale of the company, almost a year after calling them off. The developer of the PillCam endoscopic capsule for diagnosis of bowel diseases has a market cap of $675 million, following a 21% rise in its share price since the beginning of the year. The asking price reportedly reflects a company value of $750-800 million, a 20% premium on the current market cap, and the intention is to close a deal by the end of the year. The sources said that three companies are interested in acquiring Given Imaging, two as strategic investors and the third as a financial investor.
Given Imaging declined to comment on the report.
Over a year ago, Given Imaging confirmed that it intended to consider "strategic options" to create value for shareholders, and that talks had begun with several parties interested in acquiring the company. Potential buyers mentioned at the time included Fujifilm Holdings Corporation (TSE:4901) unit Fujinon, Johnson & Johnson (NYSE: JNJ), and Samsung Electronics Co. Ltd. (KSX: 5930; LSE: SMSN). When Given Imaging could not obtain the company value it wanted, its board of directors ended the talks. It reportedly reviewed offers at a company value of $700-750 million, but Given Imaging's controlling shareholder, Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH) had apparently hoped for more, possibly as much as $1 billion.
After the talks were called off, Discount Investment Corporation (TASE: DISI), through which IDB controls Given Imaging, announced that it wanted to sell its 46% stake in the company (held directly and through subsidiary Elron Electronic Industries Ltd. (TASE: ELRN) and Rafael Development Corporation, Elron's joint venture with Rafael Advanced Defense Systems Ltd.). The reason for the decision was IDB's financial distress.
New multibillion dollar markets
Today's Given Imaging is in a different place from where it was a year ago. Since the talks for the sale of controlling interest were ended, Japan's Pharmaceuticals and Medical Devices Agency (PMDA) has approved the company's upgraded PillCam capsule and the company has obtained insurance indemnification for it. The company will able to begin sales of the upgraded capsules in early 2014, opening a market worth hundreds of millions of dollars. The company hopes to obtain US Food and Drug Administration (FDA) approval by the end of the year. US marketing approval and insurance indemnification will add another $1.7 billion market.
In its full-year guidance for 2013, Given Imaging project earnings per share of $0.80-0.88 on $195-205 million revenue, although it recently said that it expects to only achieve the lower threshold of the guidance. It had $142 million in cash at the end of September.
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2013
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